November 8, 2012 E4101v1 Belarus Energy Efficiency Project Additional Financing Reconstruction of Mogilev CHP-1 based on Gas Combined Cycle Technology Environmental Management Plan Implementation of the Original Energy Efficiency Project Implementation of the original project was in full compliance with the Environmental Management Plan (EMP). All necessary permits, approvals and licenses were provided by regulatory authorities and the Contractor was operating in compliance with Belarusian environmental and sanitary regulations and the project EMP. No outstanding issues were identified during supervision of the project. Site Description The Mogilev CHP-1 is an important energy enterprise in the City of Mogilev. It currently supplies heat via system water to the housing and utilities sector, industrial enterprises, office and residential buildings in the south-west part of Mogilev for heating and hot water supply purposes, via steam to industrial enterprises for industrial needs, as well as electric power to the Belarusian power grid. The maximum installed electric capacity of the Mogilev CHP-1 turbogenerators is 21 MW. The installed heat generating capacity of the turbines is 149 Gcal/hr. Due to substantial physical deterioration of the plant equipment, phased upgrades of the CHP will be performed. For the purpose of enhancing the security of heat and electric energy supply and improving the efficiency of utilization of fuel and energy resources, Phase I upgrades will provide for:  installation of a gas turbine with the electric capacity of 25 MW (analogue to SGT-600 by Siemens) and a heat recovery boiler without afterburning equipment (analogue to KGT-40-3,9-440 by Barnaul Boiler Equipment Plant) with the steam capacity of 40 tons/h;  installation of a cooling system for the gas turbine equipment with dry cooling towers;  installation of system water heaters with heater condensate after-coolers;  installation of line pumps;  replacement of the make-up deaerator along with heaters for chemically treated water, make-up water coolers, and make-up water pumps of the district heating system;  installation of a hydraulic lock in the system water return pipeline;  construction of a drummed oil storage;  construction of 110 kW switchgear and installation of two compact gas-insulated switchgear units;  installation of two 110/10/6 kW transformers with the capacity of 40 MWA;  construction of a 10/6 kW indoor switchgear unit. Projected commissioning date: 2015. The installed new turbine will be gas-fired (without back- up fuel). 2 Pursuant to the design, reconstruction of the Mogilev CHP will also include implementation of an automated process monitoring and control system for the turbines, the generator, the heat recovery boilers and auxiliary equipment. Environmental Impact On the basis of the findings of the environmental impact assessment and the projections of impacts from the CHP operation, it has been established that installation of the aforementioned equipment will not change the habitat conditions. The expected air pollution resulting from CHP emissions, as well as anticipated pollution discharges, is below the values used as standards and criteria, which means that operation of CHP will not cause any adverse environmental impacts. Power plants of CCGT type are characterized by low specific fuel consumption per kilowatt-hour and significantly lower specific emission rate per ton of burned fuel as compared to other types of plants. Gas turbines are based on low-emission burning of natural gas. Combustion takes place in combustion chambers operating on prepared homogeneous gas/air mixture with high excess air ratio (� = 2÷2.1) and a stable and relatively low (1500-1550С) flaring temperature. These combustion conditions allow for limiting NОx generation to 40-50 mg/m³ (with 15% oxygen content in off-gases) and ensure clean burning (СО 50 mg/m³). For reasons given, it is highly probable that after implementation of this project atmospheric emissions will not exceed permissible limits over the area of influence of the Mogilev CHP. Such powerful noise sources as CCGT units are manufactured in heat/noise-attenuating casing. This solution allows for keeping the level of noise from CCGT equipment below 80 dB at a distance of 1 m from the heat/noise-attenuating casing, which meets the requirements of GOST 12.1.003 and ensures compliance with sanitary standards. An analysis of possible emergencies at the reviewed CHP and of their consequences has shown that the probability of emergencies capable of causing environmental disturbances is negligibly small. No disposal of PCB and/or asbestos is expected during implementation of the project. Based on the combination of all indicators, the materials of the performed Environmental Impact Assessment for the Mogilev CHP indicate that it can be operated without adverse environmental effects provided that necessary environmental management measures are put in place. Moreover, the project will have a positive impact on the environment and human health from reduced air pollution at the national level from reduced amount of fossil fuels burned. 1. Mitigation Plan The mitigation plan below provides a description of proposed measures to abate the anticipated impacts of the project activities during the construction and operation stages. The plan also indicates responsibilities with respect to mitigation measures application and associated costs. Schedule Impacts Mitigation Plan Expenditures Responsibility Construction stage Year 1 All impacts Preparation of a Construction Site Environmental Not high Contractor Months 1-2 Management Plan. Draft Plan due not later than 1 month after contract award notification. Final plan due before end of month 2. Review by PMU. 3 Construction Noise pollution - Works shall be performed strictly during normal Not high Contractor weekday working hours. If there is a need to carry out works with a higher noise level at night time, the residents of nearby communities shall be notified 10 days in advance. - Noise barriers should be installed when it appears necessary and workers shall be provided with ear plugs as a protection measure to perform high-level noise works. Temporary air - Dust and traffic emissions will be minimized by Not high Contractor pollution (NOx, good operation management and site supervision. dust etc.) from - Dust suppression measures (e.g. water sprinkling) construction will be applied during long dry periods; construction works and workers will be provided with anti-dust masks, when increased traffic necessary. 4 Schedule Impacts Mitigation Plan Expenditures Responsibility Pollution of soil  Machinery will be checked daily for leaking oil Not high Contractor and water at the and fuel. construction site  Washing of machinery at the construction site will through oil or be prohibited. fuel spillages.  Waste oil will be collected in secure containers and stored at a designated secure area prior to disposal. In case PCBs (polychlorinated biphenyls) are found through reviewing documents that contain specifications of transformer oils (for changing oil, the applicable oil type is indicated in the specifications of serviceable transformers), they will be disposed of in accordance with national and international standards, in particular, EU standards or equivalent US EPA standards. Hazardous waste shall be collected and removed only by a properly licensed organization. Soil and water  Working areas will be temporarily out of bounds Not high Contractor pollution, injuries to non-works personnel. to contractors’  Working places will be provided with containers workers and for domestic and small construction wastes. other persons  Construction waste will be stored in a secure, during works designated area prior to removal to a waste landfill from improper site. storage of construction waste at the construction site. Injuries to  Adherence to safe working procedures will be Not high Contractors contractors’ enforced and constantly monitored by the and the workers during construction site management and designated state management of construction agencies for construction supervision. CHP-1 works. Damage to Shall it be necessary to work with asbestos- Not high Contractors human health due containing materials, workers must wear protective and the to exposure to glasses, masks and gloves. management of asbestos Disposal of asbestos containing waste will be CHP-1 containing performed by an authorized organization. materials. 5 Schedule Impacts Mitigation Plan Expenditures Responsibility Increased risk of - A traffic management plan will be developed for a Not high Contractor traffic accidents construction site and adhered to. Such a management from increased plan will identify, inter alia, optimal traffic routes traffic of heavy and time for construction materials delivery, machinery. collection and transportation of construction waste to disposal sites, etc. - Traffic will be temporary diverted and safe speed limits will be established and enforced during the construction period, If necessary. Increased soil - Disturbed topsoil will be remediated and rapidly Not high Contractor erosion. growing vegetation will be planted. - Disturbed paved areas will be re-paved. Pollution caused - Scrap metal will be separated from other Not high Contractor by poor disposal construction waste for recycling. Middle-size of waste concrete scum without rebar rods may be used for materials. filling deep gullies, hollows and other types of road repair works. - Construction waste will be disposed of only at the designated landfill sites. Loss of or - If any archaeological artifacts are found, work shall Not high Contractor damage to be immediately interrupted and the respective local archaeological authorities and experts shall be informed. artifacts. Operation Year 1. All impacts Preparation of a facility-level environmental Not high Operator Months 1-2 management plan. Review by PMU and the local environmental authorities. Consultations with the stakeholders, including the community. Operation period 6 Schedule Impacts Mitigation Plan Expenditures Responsibility Soil and ground - A proper system to contain spills (e.g. dikes and Not high Operator water pollution and portable booms) along with emergency response damage to human equipment to collect spilled material, shall be in health from place. accidental spillage of - Personnel should be properly trained on how to act fuel (diesel and fuel in case of oil/fuel spillages and leakages. oil) and turbine and - Appropriate emergency response procedures should transformer oil from be developed. Personnel should have adequate storage tanks and knowledge of how to act in case of oil/fuel spillages during shipment. and leakages, and of the proper use and maintenance of emergency response equipment. Refresher training and regular emergency simulation drills should be performed. Noise Respective occupational safety standards shall be Not high Operator enforced. Equipment to be installed will meet the requirements of GOST 12.1.003. Workers shall be provided with noise protective gear, if necessary. Fire hazard Respective Belarusian fire protection standards and Not high Operator rules shall be enforced. Regular inspection of the boiler house by the respective fire protection authorities will be conducted. Emergency response procedure in case of fire shall be developed. Refresher training and regular emergency simulation drills shall be performed. 7 2. Monitoring Plan In order to ensure efficient implementation of the mitigation measures proposed, including compliance with the environmental requirements during the construction stage, a plan of monitoring activities has been developed and presented below in a tabular form. This monitoring plan outlines monitoring activities for the Mogilev CHP-1 reconstruction project. More detailed monitoring plans will be developed and agreed by the responsible environmental authorities, following preparation of design and construction documents. Regular local monitoring will be conducted by the Employer and contractors during the construction phase; and, afterwards, by the Operator during the operation stage. Local environmental authorities will also perform regular site inspections during the construction and operation phases. It should be noted that the Department of State Labor Inspectorate is responsible for the issues related to occupational safety and health. The State Capital Construction Department is responsible for overall supervision of construction works. The Department for Protection and Restoration of Historical and Cultural Heritage is responsible for cultural issues, including management of archaeological sites and finds; and the local environmental authorities are responsible for environmental supervision. Monitoring responsibilities are presented in the table below in more detail. It should also be noted that according to the Belarusian legislation, the costs associated with performance of local environmental monitoring are borne by the facility operator and the environmental authorities. Place of Form of Stage Parameters Periodicity Costs Responsibility monitoring monitoring Construction Atmospheric Monitoring posts Visual control Regular Not high Contractor and the emissions. will be identified and measurement monitoring of local Fugitive dust from around the major of Total fugitive dust. environmental earth works and construction sites, Suspended Ad-hoc authorities. Motor traffic (measured as near sensitive Particulates. measurements Vehicle Total Suspended areas (residential Measurements of during long dry inspectorate. Particulates) and areas, schools, vehicle exhaust periods. fumes from medical facilities and checks of Random exhaust machinery (measured etc.) technical measurements as CO / NOx). passports of each (on average, four vehicle. measurement campaigns per year). Noise. Monitoring points Measurements. Random Not high Contractor and the Noise level. will be identified Noise levels will measurements local around the major be monitored (on average, four environmental construction sites, within and around measurement authorities. near sensitive the construction campaigns per areas (residential sites, in year). areas, schools, compliance with Ad-hoc medical facilities the national measurements in etc.) standards for case of measurement complaints. methods. 8 Place of Form of Stage Parameters Periodicity Costs Responsibility monitoring monitoring Waste. Construction sites Visual control / a. Continuous Not high Contractor. Construction waste and construction Landfill monitoring by Capital waste disposal documentation the Contractor. Construction sites (e.g. review b. Random Department. landfills). monitoring (on Local average, four environmental inspections per authorities year) in the framework of inspections conducted by environmental authorities and other state supervisory agencies. Check of license for waste disposal/removal (collection) Occupational health and Construction sites. Inspections a. Continuous Not high Contractor. safety. monitoring by Department of Adherence to the safe the Contractor. State Labor work procedures. b. Regular Inspectorate. Working areas to be inspections by Capital temporarily out of the state Construction bounds to non-works supervisory Department. personnel. agencies 9 Place of Form of Stage Parameters Periodicity Costs Responsibility monitoring monitoring Water and Soil. Construction sites Inspections Continuous Not high Contractor. Construction waste shall monitoring by Capital be stored in a secure the Contractor. Construction designated area prior to Regular Department. removal to a waste inspections by Local landfill site. the state environmental Checks to detect oil supervisory authorities leaking from machinery. agencies Pollution of nearby surface water bodies by run-offs from construction sites. Separation of topsoil and subsoil during excavation works, with careful replacement of topsoil. Cultural heritage. Construction sites Inspections Continuous Not high Contractor. Archaeological “chance monitoring by Department for finds�. the Contractor. Protection and Regular Restoration of inspections by Historical and the state Cultural supervisory Heritage. agencies. 10 Place of Form of Stage Parameters Periodicity Costs Responsibility monitoring monitoring Operation Air pollution. Boiler house Measurements Regular Not high Operator. 1. Emission stack. measurements Local concentration of NOx, Previously (at least once per environmental CO, SO2 defined air quality month) in the authorities. 2. Surface concentration monitoring winter time of NOx, CO, SO2 locations (e.g., conducted by the residential areas, Operator in hospitals, schools, accordance with etc.) within the the EMP for the boiler house boiler house. airshed. Regular monitoring by the local environmental authorities (at least once per year in the winter time). Noise. Work places at Measurements First time – after Not high Department of Noise level. CHP-1 commissioning State Labor of the new Inspectorate. equipment of Healthcare CHP-1. authorities Afterwards – regular inspections. Water. 1. CHP-1 1. 1. Regular Not high Operator. 1. Boiler house wastewater Measurements sampling as per Employer. Local wastewater discharged discharge outlets EMP for CHP-1 environmental to the municipal (at least once per authorities / sewerage system: oil month). Public Utility and grease, pH, Total Company. Suspended Solids, Total Residual Chlorine, Iron, Copper, Zink. 11 Place of Form of Stage Parameters Periodicity Costs Responsibility monitoring monitoring 2. Monitoring of the 2. Petrochemicals 2. Inspections 2. а. First time – oil/fuel tanks area to storage areas. after detect oil or fuel commissioning leakages and spills from of the new storage tanks and equipment of containers; CHP-1. - Availability of Afterwards – structures to contain regular spills. inspections. Emergency response b. Continuous procedures are in place. monitoring by Personnel know how to the Operator and act in case of emergency CHP-1 oil/fuel spills. management. Soil. Petrochemicals Inspections First time – after Not high Operator. Petrochemical leakages storage areas commissioning Local and spillages from of the new environmental storages and tank equipment of authorities. cisterns. CHP-1. Petrochemicals storage Afterwards – areas have structures to regular contain spills and leak- inspections. proof bases. Continuous Personnel know how to monitoring by act in case of the Operator and emergency oil/fuel CHP-1 spillages. management. Risk of fires. CHP-1 territory Inspections Continuous Not high Operator. Adherence to fire safety monitoring by Fire safety rules and procedures. CHP-1 authorities management. Random inspections by fire safety authorities Head of Operation and Technical Department V. V. Makarenko